Unit-III Entrepreneurial planning
• Meaning of Entrepreneurship
The term entrepreneurship is derived from the French word entreprendre, meaning "to
undertake." The concept first emerged in the 17th century, with economist Richard
Cantillon using entrepreneur in the early 18th century to describe individuals who take
on financial risks to operate businesses. Over time, economists like Jean-Baptiste Say
and Joseph Schumpeter expanded the concept to include the role of innovation,
economic disruption, and the creation of new markets.
Entrepreneurship is the process of creating, developing, and managing a new business
venture with the aim of making a profit, addressing a need, or solving a problem. It
involves identifying opportunities, taking risks, and innovating to bring new ideas,
products, or services to the market. Entrepreneurs are individuals who drive this
process; they take on the financial and personal risks to start and run the venture.
Beyond economic gains, entrepreneurship can also have social impacts, such as job
creation, community development, and the fostering of innovation in society.
• Prerequisites for becoming an entrepreneur
Becoming an entrepreneur involves several prerequisites that equip individuals to start
and sustain a business successfully. Here are some key ones:
1. Mindset and Motivation: A positive, resilient mindset is essential, as entrepreneurship
involves facing uncertainties and challenges. Passion and motivation help drive
entrepreneurs through tough times and setbacks.
2. Business Knowledge and Skills: Fundamental business skills in areas like finance,
marketing, management, and operations are crucial. This knowledge helps
entrepreneurs make informed decisions, manage resources, and adapt to market
demands.
3. Problem-Solving and Innovation: Successful entrepreneurs can identify problems and
think creatively to find innovative solutions that can lead to viable business
opportunities.
4. Financial Resources: While not always essential, having access to initial capital
(through personal funds, investors, or loans) helps cover startup costs and sustain the
business until it becomes profitable.
5. Networking and Support: Building a network of contacts, mentors, and industry experts
can provide valuable advice, resources, and potential partnerships that can benefit the
business.
6. Risk-Taking Ability: Entrepreneurship often involves calculated risks. Being willing to
take these risks, while carefully assessing potential outcomes, is a key characteristic.
7. Adaptability and Resilience: Market conditions and customer needs change frequently.
Entrepreneurs need to be flexible, open to feedback, and resilient in adapting to change
and overcoming obstacles.
8. Basic Legal Knowledge: Understanding the basics of business law, including contracts,
intellectual property, and employment regulations, is essential for compliance and
protecting the business’s interests.
9. Market Research Skills: Knowledge of how to research and analyze the market,
competitors, and customer preferences helps in developing a product or service that
meets real market demands.
10. Leadership and Communication Skills: Strong leadership and communication skills
enable entrepreneurs to inspire, manage teams, and effectively convey their vision to
employees, investors, and customers.
These prerequisites provide a solid foundation for entrepreneurship, increasing the
likelihood of business success in a competitive environment.
• Stand-Up India Scheme
A scheme by Ministry of Finance for financing SC/ST and/or Women Entrepreneurs by
facilitating bank loans for setting up a greenfield project enterprise in manufacturing, services,
trading sector and activities allied to agriculture. The objective of this scheme is to facilitate
bank loans between Rs. 10 lakh and Rs. 1 Crore to at least one Scheduled Caste (SC) or
Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting
up a greenfield enterprise. In case of non-individual enterprises, at least 51% of the
shareholding and controlling stake should be held by either an SC/ST or Woman entrepreneur.
(Greenfield Project: is a type of project that involves creating something from scratch. It is a
term used to describe a project that has no existing infrastructure, processes, or systems in
place.in this context, the first-time venture of the beneficiary in the manufacturing, services,
agri-allied activities or the trading sector.)
Objective
The objective of the Stand-Up India scheme is to facilitate bank loans between 10 lakh and 1
Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one
woman borrower per bank branch for setting up a greenfield enterprise.
Eligibility
1. SC/ST and/or woman entrepreneurs, above 18 years of age.
2. Loans under the scheme is available for only green field projects.
3. In case of non-individual enterprises, 51% of the shareholding and controlling stake should
be held by either SC/ST and/or Women
Entrepreneur.
4. Borrower should not be in default to any bank/financial institution.
Nature of Loan
Composite loan (inclusive of term loan and working capital) between 10 lakh and upto 100
lakh.
Purpose of Loan
For setting up a new enterprise in manufacturing, services, agri-allied activities or the trading
sector by SC/ST/Women entrepreneur.
Size of Loan
Composite loan of 85% of the project cost inclusive of term loan and working capital. The
stipulation of the loan being expected to cover
85% of the project cost would not apply if the borrower’s contribution along with
convergence support from any other schemes exceeds
15% of the project cost.
Interest Rate
The rate of interest would be lowest applicable rate of the bank for that category (rating
category) not to exceed (base rate (MCLR) +
3%+ tenor premium).
Repayment
The loan is repayable in 7 years with a maximum moratorium period of 18 months.
• Start-up India
Startup India scheme is an important government scheme that was launched on 16th
January 2016 with an aim to promote and support the start-ups in India by providing
bank finances. It was inaugurated by the former finance minister, Arun Jaitley.
Organized by the Department for promotion of industry and internal trade, the major
objective of Startup India is to discard some of the restrictive States Government
policies which include:
1. License Raj
2. Land Permissions
3. Foreign Investment Proposals
4. Environmental Clearances
The Startup India scheme is based majorly on three pillars which are mentioned
below:
1. Providing funding support and incentives to the various start-ups of the country.
2. To provide Industry-Academia Partnership and Incubation.
3. Simplification and Handholding.
Who is eligible to apply under the Startup India scheme?
An entity is eligible to apply when:
• It is incorporated as a private limited company or partnership firm or a limited
liability partnership in India
• It has less than 10 years of history i.e. less than 10 years have elapsed from the date of
its incorporation/registration
• The turnover for all of the financial years, since the incorporation/ registration has
been less than INR 100 crores
Note: An entity formed by splitting up or reconstruction of a business already in
existence shall not be considered a ‘Startup’.
Benefits
After the launch of the Startup India scheme, a new program was launched by the
government named the I-MADE program which focused on helping the Indian
entrepreneurs in building 1 million mobile app start-ups. The government of India had
also launched the Pradhan Mantri Mudra Yojana which aimed to provide financial
supports to entrepreneurs from low socioeconomic backgrounds through low-interest
rate loans. Some of the key benefits of Startup India are as follows:
1. To reduce the patent registration fees.
2. Improvement of the Bankruptcy Code ensuring a 90-day exit window.
3. To provide freedom from mystifying inspections and capital gain tax for the first 3
years of operation.
4. To create an innovation hub under the Atal Innovation Mission.
5. Targeting 5 lakh schools along with the involvement of 10 lakh children in
innovation-related programs.
6. To develop new schemes that will provide IPR protection to startup firms.
7. To encourage entrepreneurship throughout the country.
8. To promote India as a start-up hub across the world.
